Realitychecker

What the IEA Doesn't Want You to Know About Peak Oil

The dangers of declining energy availability have been recognised but not debated in the mainstream media by politicians for over 50 years, as this remarkably prescient article written by Admiral Hyman Rickover in 1957 shows.

www.energybulletin.net...

As Lionel Badel’s excellent article strongly suggests, globally speaking, governments of all political persuasions still don't want to debate this topic publically. One can only speculate on the reasons for their timidity, but I believe it's because their financial sponsors want them to maintain the "business as usual" approach of continuous economic growth. That this economic model is unsustainable on a planet endowed with finite fossil fuel (and other mineral) resources appears to be incomprehensible to our governing elites.

The proof of this incomprehension is illustrated by the vast sums of (virtual) money being created to stimulate economies around the globe. Ironically, this approach had it been adopted in the 1930's would probably have prevented the decade long depression, because oil was relatively cheap and abundant so economic activity would have recommenced. Unfortunately this is no longer the case today, so the current financial stimulus policies will almost certainly fail to achieve its objective, since energy shortages will choke off economic recovery.

Peak Oil for Dummies

Another good article on the impending energy crunch by Lionel. The link below goes to an interesting paper produced by Shell, which descries two future energy scenarios. No surprise that their "Scramble" scenario describes the approach most governments appear to be drifting towards.

www.shell.com/home/con...

Peak Oil - Are We There Yet?

An excellent article on peak oil. The IEA supply predictions that governments use to try and maintain their "business as usual approach", has until possibly this year, been based on flawed logic. It has been assumed supply will always increase to meet demand, so future supply predictions have simply been based on demand projections. With a finite resource such as oil, this assumption is only valid for a no growth extraction scenario that enables past demand/supply behaviour to be used for predicting future demand/supply behaviour. When extraction is actually growing at a constant rate each year, say 2-3 percent, the extraction profile is increasing in an exponential fashion, which causes the IEA approach to fail once the curve has starts to increase steeply.

The reality is that global oil production has been on an undulating plateau since c. 2005 and its consequences are likely to become increasingly unpleasant for us all. In the 1970's a 5% shortfall in supply caused the price of oil to almost quadruple initiating a serious recession. If we are now on a plateau, the resultant oil demand destruction due to recession will temporarily correct the supply/demand imbalance and reduce the price of oil. When the global economy starts to expand again the demand for oil will increase, but supply constraints will cause its price to start increasing again, which in turn precipitates another recession. This cycle will continue until the oil plateau ends with an irreversible decline in oil production, how long this plateau lasts is debatable, but it may not be that long.

If the world has failed to develop sustainable alternatives to oil when oil production eventually goes into decline we will all be in deep trouble. Fossil based energy, in particular oil, has enabled the global economy to expand allowing the population to grow to 6.7 billion, the resultant energy crunch will be disastrous without viable alternatives capable of providing equivalent amounts of energy suitable for electricity generation and feedstock’s for the petrochemical industry.

A combination of stupidity and greed by the banking sector combined with weak ineffectual regulation, allowed a housing bubble to develop that has now burst, causing the current financial crisis. A major concern should be that this banking crisis, combined with the economic consequences of an oil production plateau, will drain the global economy of the wealth needed to fund the massive investment needed to develop and construct alternative and sustainable sources of energy for power production, transport fuel, and feedstock’s for the chemical industry.

This link gives an excellent “crash course” in economic concepts and peak oil, www.chrismartenson.com.... In addition, the book “The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man” by David Strahan is well worth reading.